In December, the U.S. manufacturing sector saw its activity decline, but the contraction wasn’t as steep as many had anticipated. The US Dollar Index, meanwhile, stayed in the red, hovering close to 109.00.
The latest data on manufacturing showed that the ISM Manufacturing PMI ticked up to 49.3 in December, from 48.4 in November, indicating a somewhat less severe contraction. This figure surpassed market expectations, which had pegged it at 48.4.
One aspect of the PMI survey, the Employment Index, dipped to 45.3 from its previous 48.1. This suggests further job cuts within the sector. However, the Prices Paid Index moved up to 52.5 from 50.3, pointing toward rising costs. Notably, the New Orders Index saw an improvement, climbing to 52.5 from 50.4.
Timothy R. Fiore, who leads the ISM Manufacturing Business Survey Committee, provided insights into the results. He noted that while demand showed some signs of picking up and production met expectations from November, there were ongoing staffing reductions, which he expects to taper off soon. On the pricing front, any growth remained modest. Fiore added that 52% of the manufacturing GDP experienced contraction in December, which is a significant decrease from November’s 66%.
In terms of market response, the US Dollar Index didn’t really budge upon release of this report, though it was observed to be down by 0.3% at 108.95 by the close of day.
